Dentsu Aegis Network Malaysia chief data officer Sue-Anne Lim tells StarBizWeek that the local ad industry will see a growth of 2.6% by year-end, while ad spend as of May has clocked in 21% of the total forecast investment so far.

“The key drivers of growth are seen to be coming from both digital and out-of-home (OOH) media, and will continue to do so throughout the year up until 2018.

“There are three key trends that are currently propelling this growth – strong penetration and higher usage of smartphones, rapid growth of online videos and the rise of digital OOH screens,’’ she says in an interview.

Amid a positive growth in digital media ad spend, analysts are still bullish about traditional media. This is likely to be driven by healthy spending in pay TV as well as increased spending in outdoor and cinema, according to Dentsu Aegis Network.

Among others, campaigns leading up to the next general election are anticipated to lift adex to a more positive territory, with TV and print likely to benefit most from campaign activities.

Based on ad spend figures from Nielsen, total ad spend for the first quarter of this year was lower at RM1.43bil, down by about 15% from RM1.68bil in the similar quarter last year.

On a month-on-month comparison, total ad spend in March stood at RM534mil against RM617mil in the same month last year. In terms of ad spend by medium, cinema registered the largest growth of about 58% year-to-date (January-March 2017), while free-to-air (FTA) television was down by 5.7%, in-store media decreased by 16.6% and newspaper shrank by about 23% over the period.

Although newspaper growth shrank, it still led the pack in terms of ad spend share with 48.3% in the first quarter, followed by FTA television and in-store media with a share of 43.2% and 2.6%, respectively, in the said quarter. Nielsen, however, does not measure digital ad spend.

In any case, based on Dentsu Aegis’ forecasts, the year-on-year drop in the first quarter should abate in the later part of the year as consumer sentiments improve to recover and end the year on a slightly positive note, up 2.6% as mentioned earlier.

Commenting on the higher usage of smartphones, Lim says smartphone penetration currently stands at 80% in Malaysia with low to middle-income consumers, primarily blue-collar workers, all being mobile-first when it comes to Internet consumption.

“Advanced handsets are increasingly more affordable and age ownership is becoming younger. As of last year, according to data from Google, in Malaysia, search from mobile phones has already surpassed desktop, not just in overall search but in key categories such as automotive, property, infant milk formula and e-commerce.

“We are convinced that mobile phone is no longer just a connectivity device but has essentially become a remote control of our lives, considering the surge of app-based functions such as Grab, Food Panda and even laundry services, where the experience is primarily focused on the palm-fitted screen.

“Marketers who are looking to either deliver a branded experience or to ensure a strategic coverage among consumers should incorporate greater creativity in delivering innovation and to be always available to consumers, whenever, wherever,’’ she adds.

Online videos, Lim says, are seeing the highest growth at 22% currently compared to all other digital channels, as proven from the excess of Hari Raya videos on social media last week.

Advertisers, she says, are turning to thumb-stopping creativity to deliver greater engagement and entertainment of branded content to ensure they are not merely adding to all the noise that is already in social media.

Due to its higher-than-usual production cost, online video might not take the lion’s share of total digital spend but it is still forecast to grow at a strong 20% plus in 2018.

Lim says: “When considering online videos, it is important to understand the context of the moment. Thumb-stopping creativity refers to the 0.2 second opportunity before the thumb pushes the content upwards, missing the chance to be viewed.

“Optimising videos in various formats and sizes increases its chance to be stopped and viewed fully, especially when this type of content continues to proliferate.

“As such, we expect social media advertising, bolstered by this trend, to grow at 15.8% as well. Due to the ‘passive’ nature of video, seems like social media will become more of a media platform rather than pure engagement channel.

“The key metric to look at is positive reach, impressions and approval rather than interactivity.”

On OOH, she adds the rise of digital OOH screens has led to new OOH buying possibilities – shorter timeframe and more ad insertions per location. OOH media is expected to close at an 11.9% growth by year-end, which is the second-fastest growing medium in the country.

Lim says there could be a revival of OOH media, considering that planning strategies can now revolve around time slots and more innovative creative ideas are expected to breathe new life to this channel.

The multiplication of mobile targeting platforms and services allow complimentary targeting and even integration between OOH and mobile marketing, all based on audience interests and geo-location data, she says.